Why HAL Should back Tejas MK-2 Project to stay relevant in India

SOURCE: MANJUNATH REDDDY/ FOR MY TAKE / IDRW.ORG

India’s longest running Premier Public sector Aerospace company Hindustan Aeronautics Limited (HAL) is facing order crunch due to the ever-increasing participation of Private Aerospace companies in Indian Defence Sector. Crunch especially has been felt at fighter aircraft segment after Government of India decides to keep HAL off the Single engine and Twin engine fighter jet requirement for 200 fighter jets and instead allowed Private Aerospace companies to partner with winning International partner.

HAL Chief recently voiced his concerns about this, since production and assembly of fighter aircraft for HAL always has been a very lucrative business which contributes immensely towards companies year-on-year growth and profits, while company is doing good business with its Rotary orders it still faces no new orders as a production agencies for its fighter aircraft division.

Assembly and Production of BAe licensed Hawks Advance Jet Trainer (AJT) for Indian Airforce and Indian Navy has been completed and by 2019-2020 all Sukhoi-30MKI orders will be completed and the only production of India’s LCA-Tejas MK1 and MK-1A is all that HAL will produce for a period of 2020 to 2025.

HAL not only failed to secure additional orders for Sukhoi-30MKI currently produced in its Nashik Plant but also failed to secure orders for Bae Hawks meant for IAF’s Surya Kiran Aerobatic display team due to price inflation. Delays in final agreement for a deal between India and Russia to co-produce 5th generation FGFA Stealth fighter jet in its Nashik Plant means that Production capacity will remain idle and the plant will be largely be focused and used for Overhauling in service Sukhoi-30s which has to lead to such poor order books for its fighter division.

India’s AMCA 5th Generation fighter jet is still at the initial stage and it is unlikely it will be ready for production by 2030. HAL is left with only orders for 83 Tejas MK-1A and 40 Tejas MK-1, HAL also faces a daunting task to keep its production capacity and plants running efficiently till FGFA and AMCA go into production.

The only project which may come to its way post-2023-25 will be Tejas MK-2 project which is still under active consideration but has not seen much of movement to move from concept to reality. Tejas MK-2 is still a project initiated by Aeronautical Development Agency (ADA) which already has seen Navy backing off from the project and also no assured order has been committed by Indian Air Force.

Tejas MK-2 project also faces a double threat which might kill the project before it becomes a reality. first being that HAL’s Tejas MK-1A for which air force already has placed orders for 83 units might see IAF re-framing its self, from placing further orders for its successor since Navy is no longer a partner in the project and Second threat, it faces is that whoever wins rights to manufacture Single engine fighter jets in India will have a production plant up and running by 2025 and might simply offer same aircraft to compete with Tejas MK-2 project.

For Tejas MK-2 project to succeed and for HAL to keep its fighter division in business till 2030, HAL will have to make sure that, post-2025, Tejas MK-2 enters scale production in good numbers for which it will need to assist Aeronautical Development Agency (ADA) which is just design and research agencies to keep the project on schedule so that it doesn’t face competition from winner of Single engine fighter jet tender .

Private Aerospace companies in India will get assured orders for minimum 200 aircraft which they will try to maximize by putting pressure for additional orders and it is pretty much clear now that Tejas MK-2 project is most vulnerable and can be axed. Order size of over 200 aircraft to Private Aerospace companies and another potential Naval order for 57 Carrier borne aircraft again going to a Private Aerospace company will mean HAL will have to stick with uncertain FGFA project which due to cost factor might see orders below 100 and AMCA Project which is yet to take off or way company can remain in the game is to ensure that Tejas MK-2 project is not axed and it enters production .

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